What’s next and what it means for the country?

The death of Iran’s Supreme Leader Ayatollah Ali Khamenei launches a formal succession process that could have major implications for the country’s political stability, the outlook for sanctions, and the already strained economy.

Iranian official media confirmed that Khamenei was killed in a joint military strike launched by Israel and the United States. The Iranian Fars News Agency said that Khamenei (86 years old) was at the time of his death in his office inside his residence. On telegram.

Khamenei took power after the death of Ayatollah Ruhollah Khomeini in 1989, inheriting a revolutionary state that is still consolidating itself after the Iran-Iraq War.

Khamenei was not seen as the clear successor. He lacked the religious qualifications required by the constitution of the time. Policy analyst In the Carnegie Endowment for International Peace, referred to in His study on Khamenei.

A few months before Khomeini’s death, the constitution was revised to stipulate that the leader need only be an expert in Islamic jurisprudence with political and administrative ability. This is the change that enabled Khamenei’s rise.

Over time, the Office of the Supreme Leader consolidated its authority over key institutions in Iran. While presidents change through elections, Khamenei I kept control On the army, the judiciary, state broadcasting, and major strategic decisions (Article 110).

Khamenei He defended the “resistance economy” To promote self-sufficiency amid Western sanctions, it has remained wary of doing business with the West He launched a campaign against his critics who claimed that his security-first approach stifles reform.

His judgment was repeatedly tested. In 2009, mass protests over alleged election fraud were met with a harsh crackdown. In 2022, demonstrations broke out over women’s rights. A serious challenge emerged in late December 2025, when economic grievances escalated into nationwide unrest, with some protesters openly calling for the overthrow of the Islamic Republic.

Similar sentiments appeared on social media platforms after his death, where Iranians were They appeared taking to the streets in celebrationaccording to the New York Times.

However, analysts cautioned that jubilation does not equal transformation.

“The overthrow of Iran’s Supreme Leader Ayatollah Ali Khamenei does not mean regime change. The Islamic Revolutionary Guard Corps is the regime,” the Council on Foreign Relations said. He noted after his deathWhich limits the possibilities of immediate political or economic transformation.

Khamenei’s death marks the second leadership transition since the 1979 Islamic Revolution. The moment described by the Council on Foreign Relations As of historical importance but highly uncertain in its outcome.

While some Iranians expressed hope that a leadership change would ease repression and economic isolation, the Council on Foreign Relations said the most likely outcome of the succession did not point to meaningful political or economic liberalization in the immediate aftermath of the transition period.

The Council on Foreign Relations stated that “a leadership change in Iran could take three basic paths: regime continuity, military takeover, or regime collapse.” However, the think tank warned that “none” of these near-term scenarios envision a positive turnaround in the year or so after the transition period.

In a continuity outcome, which is essentially “Khamenei without Khamenei,” investors and households may still face uncertainty because the new leader will need to “learn on the job” while trying to formulate economic policy with limited resources and increasing pressure.

Even a shift toward tougher military dominance does not mean economic reform: the Council on Foreign Relations notes that the security-led model may talk about stability and economic management, but it will still struggle against what it calls a “severely distorted economy” with “persistent inflation and a collapsing currency.”

Marko Babic, chief strategist at Clocktower Group, echoed a similar position: “The Iranian economy will soon turn into a parking lot unless the next supreme leader is more willing to negotiate with the United States.”

He added that if the Supreme Leader is replaced by another hardliner who does not want to negotiate with the United States and continues attacks against the region, US military operations will become punitive and “Iran will return to the medieval era.”

Keith Fitzgerald, managing director at Sea-Change Partners, puts it more bluntly.

He added: “Khamenei’s killing does not in itself mean a change in the regime.” Think of it like changing a light bulb: To change it, you first have to remove the broken bulb that was sitting there. But doing so does not mean changing the lamp. This requires replacing it with a new one,” he wrote in a note.

In addition, the Iranian opposition in exile remains fragmented and lacks a unified leadership, said Ali J.S., a former strategic intelligence analyst at NATO’s Joint Warfare Center.

She added that importing a political figure from abroad, whether it is a restored monarchy or another alternative, “has limited credibility on the ground and risks repeating previous experiences with umbrella elites that have ended badly elsewhere.”

The Iranian opposition in exile is diverse but largely divided. They include royalists allied with Reza Pahlavi, the US-based son of the late Shah who was exiled after the 1979 revolution; Republican activists and secular Democrats spread throughout Europe and North America; Kurdish opposition groups operating along Iran’s western border; and the People’s Mojahedin Organization of Iran, which maintains an organized political network abroad but has limited credibility inside Iran.